Former GTE Chief Will Head Ingram Micro
Computer products distributor Ingram Micro Inc. named former GTE Corp. veteran Kent Foster chief executive Monday, ending six months of uncertainty over who would lead the troubled Santa Ana giant.
Foster takes over from Jerre Stead, 57, who guided the company to a pinnacle of profitability in mid-1998 before an industrywide price war sent its earnings down.
Foster, 56, who rose through GTE’s ranks to become president before he retired in December, also will succeed Stead as Ingram’s chairman in May, the company said.
Foster’s 29-year career in telecommunications would seem to make him an odd match for Ingram, which serves as the world’s largest pipeline between computer-industry manufacturers and retailers. But as GTE’s second in command, Foster presided over a sweeping consolidation and modernization, bringing GTE into the Internet Age and back into the long-distance-service market.
Ingram, too, is in transition, re-envisioning itself as a business-to-business e-commerce company rather than a traditional wholesaler.
“We wanted someone experienced in an industry that went through a major transition, who had an understanding of the Internet and who could be an agent of change,” Stead said.
Ingram, Orange County’s largest company, needs a turnaround.
Its profit fell by 25% last year even though sales grew by 27%, reflecting the razor-thin margins that drove several rivals out of business or into mergers. Ingram’s stock price, which reached a high of more than $52 in September 1998, closed Monday at $11.19, down 38 cents, on the New York Stock Exchange.
The reversals shook morale, prompting more than 20 Ingram executives to leave. Stead, who took the reins in 1996 and was once the highest-paid executive in Orange County, announced in September that he would step down once a successor was found.
Analysts praised Foster’s appointment, saying his long experience in the upper echelons of management would steady Ingram.
“It will help the company define its vision and strategy, which has been difficult with a temporary leader,” said Tom Cal, an analyst with SoundView Technology Group. “I was impressed with his understanding of Ingram’s role as an information aggregator and not just a mover of physical products.”
Foster said Monday that he had no immediate plans to overhaul Ingram’s strategy.
Ingram has begun to charge fees for its services rather than add markups to the products it resells, a shift meant to protect its margins in future price wars and to create new profit centers. Ingram also helped to create RosettaNet, a computer language that will ease business-to-business online transactions.
